Sweet baked goods manufacturer Carolina Foods is getting an investment from Charlotte, N.C.-based private equity firm Falfurrias Capital Partners.
The terms of the deal were not disclosed, but Carolina Foods CEO Paul Scarborough will remain with the company alongside third-generation company leaders Katie Scarborough Caldwell and Ruffin Scarborough. After the deal closes, Tad Dickson, former CEO of Harris Teeter, and Mary-Ann Sommers, a CPG veteran who worked at Hershey and Coca-Cola, will join the company’s board of directors. Both acted as advisors to Falfurrias throughout the transaction process.
"This partnership will give us the financial resources and management expertise to take Carolina Foods to another level," said Paul Scarborough, who joined the family business in 1977. "Falfurrias has a tremendous track record of helping the companies they invest in realize next-stage growth, and their expertise in food marketing and distribution will be especially useful to our organization."
Carolina Foods’ flagship brand is the Duchess line of sweet treats, but the 87-year-old company also does private label manufacturing and co-packing, making it one of the country’s leading wholesale bakeries. The company operates out of multiple locations in Charlotte, including a 100,000-sq.-ft. facility in Charlotte’s South End neighborhood.
"We have been aware of Carolina Foods for a number of years and have been impressed by the success of the business," said Falfurrias partner Chip Johnson. "We always enjoy partnering with companies in Charlotte, and this deal is especially exciting to us given our recent focus on the packaged foods market. We feel we can add a great deal of value to the company based on our team's knowledge of food manufacturing, marketing, and distribution."
Falfurrias’ investment in Carolina Foods is the private equity firm’s third food category investment in the past two years. In 2019, it acquired condiment, sauce and spice manufacturer Sauer Brands, followed by the add-on acquisition of branded popcorn seasoning company Chicago Custom Foods.
"We see tremendous growth potential for Carolina Foods, including expanding both its manufacturing capacity and distribution footprint," said Falfurrias chairman Marc Oken. "They've built a fantastic company based on great products, great people and sound management, and we're excited to be partners in this next stage of their development."